UPDATED: Largest Long Beach union rejects pension reform deal

LONG BEACH — Members of the city's largest employee union have rejected a pension reform proposal that would have saved the general fund an estimated $3.9 million next year.

The result of the vote taken Thursday was confirmed on the website of the International Association of Machinists and Aerospace Workers (IAM).

"Local 1930 IAM Members voted last night, August 16 th, to reject the city's final pension reform proposal," the message read.

"Thank you for your overwhelming participation. We have no new information at this time but we will keep you updated as we learn more in the future."

IAM President Richard Sanchez could not be reached for comment.

Sources said the proposal contained elements similar to the retirement concessions made by Long Beach's police and fire unions last year. Those organizations agreed to create a lower tier of benefits for future employees and applied raises advanced by the city as part of the deals to pay their full employee share of retirement costs.

Long Beach will spend about $100 million less in pension obligations by 2022 as a result of the new contracts with police and fire.

In a statement, Mayor Bob Foster accused the IAM of choosing "personal gain over serving their community."

"The deal put before them was a fair one that would not negatively affect the money they currently take home, but would use future raises to significantly reduce pension costs and provide future budget relief," Foster said.

"While the Police Officers Association and the Firefighters Association realized the wisdom in this approach, unfortunately the IAM did not."

Officials estimated the reforms would have resulted in an estimated $12.2 million saved across all funds next year.

City leaders are debating a budget proposal that balances a $17.2 million shortfall for fiscal year 2013.

The City Council must pass a budget by Sept. 15 for the fiscal year starting Oct. 1.

Projected deficits in 2014 and 2015 are $10.9 million and $6.4 million, respectively.

With the deal between the IAM and the city dead, the issue may be sent to a vote of the people.

Foster has several times threatened to place a pension measure on the ballot, most recently when he gave his mayor's budget recommendations earlier this month.

"It is not my preferred path, but reform is a necessary outcome and I am left with no other option," Foster said then.

The current IAM contract expires Sept, 30, 2013.

Union members are due a 2 percent raise on Oct. 1, according to Long Beach Human Resources Director Debbie Mills.

An additional 5 percent raise is also possible next year due to unallocated money remaining in the contract, she said.

Long Beach has $1.2 billion in unfunded pension liabilities after giving retroactive benefit increases in 2002.